EU agrees climate trading negotiations stance

Ministers abandon quantified cap, call for ceiling to be defined quantitatively and qualitatively

EU environment ministers meeting in Luxembourg have finally hammered out an EU negotiating position for the Buenos Aires international climate change talks in November. The agreement includes a compromise on how limits should be set on industrialised countries' use of "flexibility mechanisms" such as emissions trading.

In line with recent indications from official working groups, the Environment Council abandoned previous EU efforts to promote a 50% cap on the use of the so-called "flex mex" (ENDS Daily 4 September). The idea has been strongly resisted by the USA, which some European countries feared would refuse to ratify the Kyoto protocol rather than accept a fixed quantitative cap.

A minority of EU countries still advocated the cap today as the only way to prevent the aims of the Kyoto protocol being undermined by some parties starting large-scale emissions trading in place of domestic reductions. The protocol itself says only that the use of flex mex must be "supplemental" to domestic action, leaving parties to decide at Buenos Aires what this means.

Following today's agreement, which followed hours of backroom negotiations, the EU will now argue that a limit to the use of flex mex "should be defined in quantitative and qualitative terms, based on equitable criteria". The wording reflects almost exactly the position before the meeting of the majority of EU countries now opposed to setting a fixed cap before going to Buenos Aires (ENDS Daily 2 October).

Ironically, much of the delay in reaching the deal appears to have been caused by objections to the compromise text voiced by Italian environment minister Edo Ronchi. Having previously supported abandonment of an EU call for a specific cap, Mr Ronchi is understood to have held out for one at today's meeting, to the surprise of Italian journalists present.

The agreement leaves unclear what precise rules EU negotiators will now argue for at Buenos Aires to govern the use of flex mex. While abandoning the 50% cap idea, the EU has maintained its call for a "concrete ceiling on the use of flex mex, suggesting it will continue to fight the USA hard on this issue behind closed doors.

A European Commission spokesperson said today that in spite of the fact that the EU will no longer argue explicitly for a 50% cap, it would still be arguing in practice for industrialised countries to meet at least 50% of their Kyoto protocol commitments through domestic actions. The Council has agreed that domestic action should provide the "main" means for meeting commitments, according to the spokesperson. Main clearly means more than half, he said.

Follow Up:
EU Council of Ministers, tel: + 32 2 285 6111.

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